Zachary Roth June 4, 2009, 11:09 AM

It looks like laundering bribes on behalf of Duke Cunningham may not have been the only shady activity that Thomas Kontogiannis had going on.

The politically connected Greek real-estate developer — who’s already serving jail time for his role in the Cunningham scheme — has been indicted, along with eight others, for an alleged mortgage fraud scheme, which swindled Washington Mutual and a unit of Credit Suisse out of $92 million.

Here’s how the operation worked, according to Reuters:

Federal prosecutors and the FBI said the scheme was centered around property developments that Kontogiannis bought and subdivided from 2001 to 2003 in the New York City boroughs of Brooklyn and Queens.

To finance the projects, the defendants are accused of staging sales of the properties financed by mortgage loans. Bogus appraisals supported the price of the properties, even where buildings had not yet been constructed or had fictional addresses, said the U.S. Attorney’s Office in Brooklyn, which is prosecuting the case.

The loans were financed by lenders controlled by Kontogiannis and later sold to Washington Mutual and DLJ, prosecutors said.

Entities controlled by Kontogiannis made monthly payments on the mortgages, ensuring that none became delinquent, until the payments ceased in 2007 with about $92 million in principal outstanding on the fraudulent loans, prosecutors said.

Kontogiannis is charged with conspiracy to commit bank and wire fraud.

In the Cunningham case, Kontogiannis helped finance the purchase of two homes, for the then-lawmaker, even though he knew that the money for the purchases had likely been obtained illegally. He also bought a yacht from Cunningham, at a considerably inflated price. Prosecutors argued that in exchange, he used the GOP congressman to meet world leaders, including President Bush and the Saudi crown prince.

Duke Cunningham, Thomas Kontogiannis